Wednesday, March 18, 2009
17 comments:
Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."
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Hey, me again, your old Trouble Shooter. This time I'm asking for your help.
ReplyDeleteGannett's pension administration staff is no longer responding to me since I requested copies of the correspondences between the pension trustee and actuary since 1997 pertaining to our prior Asbury Park Press personal cash-balance pensions.
It's bugging me that our taxes are going to pay those AIG executive bonuses, because their prior contracts just could not be broken when we bought 79.9% or 85% of the company (sources vary), yet somehow the contract terms changed for our old APP personal pension accounts that rolled into Gannett's group pension. I'm trying to find out who made or agreed to that change on our behalf and why.
I've left a message with Donna at Press Communications asking Don Lass or Jules Plangere to look into it and call me, but Donna did not seem optimistic and I've received no reply. Does anyone reading here have pull to persuade them to check their sales documents for clues? I'm also seeking the actual closing date on the APP sale to Gannett.
It might help break the logjam if others lobbied on my behalf by contacting Carrie Oman or Roxanne Horning to urge them to respond soon to my request for copies of related letters/emails between the actuary (Oman refused to tell me who that is) and the trustee (Oman failed to answer who that is, but I believe it now is Northern Trust Bank of Chicago). It affects a lot of former and current APP employees and may parallel the pension deals for Home News Tribune, Army Times and other Gannett properties purchased in 1997.
Carrie Oman
Phone: (703) 854-6281
Fax: (703) 854-2006
coman@gannett.com
rhorning@gannett.com
I created an email address, APPpensions@hotmail.com, for people who want me to keep them posted on what I find out or discuss details privately.
To be more specific about the apparent contract change, the current Summary Plan Description says the same thing as the SPD Gannett published in 1998: The percentage from prior plans is determined "taking into account your benefit under the predecessor Plan."
Gannett is cashing out at only our 1997 individual account balance raised by the percentage of whatever pay raises we may have received since 1998, and not by the 3% per year COLA contribution plus all interest earned on the principal -- all compounded annually and not only at cashout time -- that the 1997 APP SPD that Oman sent me promised.
Obviously, the new contributions ended and were replaced by Gannett's defined benefits when we became Gannett pensioners. Surely, there are documents to explain when and how the portion of the contract related to adding our earned interest and annual compounding were "taken into account" and determined to be close enough to be replaced by the final rate of each individual's pay raises.
Merit salary increase is a puzzling basis to determine value increases in our prior cash-balance pension accounts, if for no other reason because it seems inequitable and irrelevant to the original pension contract. Yet, I don't know enough about how this transpired to make a claim it might be unjust. Please help me shake out those documents.
Linda H , Gannett enterered into a "Master Trust Agreement" that designated as the "Trustee" of plan:
ReplyDeleteThe Northern Trust Co.
50 South LaSalle Street
Chicago,Illinois 60675
They are to receive hold and invest plan contributions and to reinvest interest dividends and other income with the exception of any funds specifically directed by the "Committee" to be managed by seperate investment advisors.
"ROCK ON NEW JERSEY
12:21, do you know when Northern Trust became trustee? Was before 1998? Is this a cut/paste from something?
ReplyDeleteAny idea who is the "committee"? It's interesting that this seems to have allowed our old pension plans to remain as they were, held separately and unconfounded with Gannett's current pension plan.
The Gannett plan was created Jan. 1, 1998, coincidentally the same date they say the pensions from 1997 purchases were first a Gannett responsibility, so it seems like there'd be no confusion or disproportionality if the "committee" had just left our prior APP under separate cover.
Oman told me specifically of our prior APP pension, "All benefits accrued at the time of the merger were rolled into the Gannett Retirement Plan." I'm not sure she is an infallible source on that, which is why I'm asking for documents to explain this pension situation.
I wonder why Gannett or Don/Jules wouldn't they have just left our prior-plan pensions to be managed like any other IRA or 401(k) savings account, since they already were individual accounts, each with our own balance. It seems particularly troublesome that they took individual accounts and rolled them into something ubiquitous that doesn't appear to have ever properly defined obligations to prior-plan pension holders.
If it's true that Dubow has a $13 million pension contract, then I have to wonder if we're not being shorted to fund his and other executives' outlandish pensions well over the 50 percent of annual income defined for Gannett workers not tied to the board of directors.
Geez, in my haste to file I misspelled my own name. How embarrassing! If it's an excuse, my "m" and "n" and a few other keys are worn to blanks.
ReplyDeleteReading about today's presentation, I do not like the sound of the words "clustering,'' "consolidations,'' "streamlined,'' and "logical partnerships.'' To me, that sounds like 150-250 people will keep their jobs and commute to Neptune, and the rest of us will be on the dole. I hope I'm wrong, of course.
ReplyDeletehttp://ca.sys-con.com/node/883364
All of this reminds me that I need to get my money out of Gannett. What's the best way to transfer it without taking a tax hit or loss?
ReplyDeleteLinda
ReplyDeleteI'm not sure what you are asking about.
Jules and Don froze the pension plan in 1991 or there about. At that time your lump sum was calculated. I'm not sure if these lump sums were given a yearly cost of living adjustment or not.
This sum was put into the Gannett pension in 1998.
What do actuaries have to do with this amount??
Linda H, I got this information from the "Gannett Retirement Plan Calculation" that was sent to me with my retirement $ totals It is dated with 1-01-1998 and Asbury plan totals were finalized as of 12-31-1997 according to my paperwork I received on 1-10-1998 from Gannett. "ROCK ON NEW JERSEY"
ReplyDeleteOur pension plan never was frozen, as I understand the Don/Jules letters I have. They froze their 3%-of-salary contributions in 1995, I think it was, and maybe the following year, but I haven't found evidence even new contributions were frozen in 1997.
ReplyDeleteThe Don/Jules letters are clear our individual account balances, which I think is what you are calling "lump sum," never ceased to accrue interest compounded at least annually until our individual accounts allegedly "rolled over" into the nonindividual Gannett Retirement Plan. Both plans were/are defined benefits, but the prior APP plan also defined contributions and earnings.
The immediate prior plan for APP, the one that accrued those cash balances, began in 1993. There were several earlier plans that I'm assuming for the time being were rolled into the 1993 Cash Balance Plan, but I do not know for sure that there aren't prior "prior plans" involved.
"Actuaries" is the answer I received from pension administrator Carrie Oman when I asked who decided this compensation system for our individual accounts that were rolled into Gannett, because I don't see where the dots connect to basing it on the end-of-employment sum of annual merit pay raises, which have averaged below the increase in national cost-of-living figures for some years.
When I then asked for the name of the actuary that decided this, Oman replied, "The Plan’s actuaries provide consulting/actuarial service to the Plan. As such, they do not field participant calls."
She has ignored my request for the documents that might tell me who made this decision and why, even though the SPD says we are entitled to copies of any document in the pension file.
I'm not saying I know much as absolute fact, because Oman is the only Gannett employee who has replied to me at all. Roxanne Horning ignores every email and certified mail I've sent to her.
"Lump sum" and "monthly annuity" are the two withdrawal options in the pension plans, but the sum stated on those final 1997 statements indicates the actual cash each of us, individually, had in our accounts on that date.
The "lump sum" you refer to at the end of 1997 applied only if you were eligible to retire by that date and chose to take pension in full instead of monthly payment for the rest of your life, I think. That sum grew since then. My questions relate to how that growth has been calculated -- and by whom.
Linda Hildebrand: Thank you for doing this. You Rock. I feel that I lost money when I cashed out. LG
ReplyDeleteLindaH, The total dollar value that was given to us on paper on 12-31-97 was what we put into the new gannett fund as a percentage% amount based on how long we were with app on 1-1-98 and was mixed into the plan that we now have with gannett
ReplyDeletewe need al colantoni to the rescue ... he was the wizard behind the curtain ...
ReplyDeleteThis was the May 6, 1996 memo:
ReplyDeleteTO: Employees
FROM: Jules L. Plangere III, executive vice president
RE: Pension and retirement plans
Over the past year, we have implemented programs designed to trim expenses as part of a comprehensive cost containment program. Part of that ongoing process has been dedicated to examining current employee benefits and determining the economic feasibility of continuing to offer these benefits in their current form. We have determined that changes must be made to our pension and retirement plans since they account for such a large percentage of our annual benefit expenses.
As a result, we are making the following changes:
Employees participating as of July 1, 1996 in the Asbury Park Press Cash Balance Retirement Plan will have no additional allocation made to their cash balance account. For employees who earned benefits under the former Pension Plan, that benefit amount was ""frozen'' as of December 31, 1993, prior to the adoption of the Cash Balance Retirement Plan. Employees are encouraged to refer to the Summary Plan Description distributed by the Human Resources Department and to their most recent Cash Balance Benefit Statement in order to determine their benefit status. Employees unable to locate their paperwork should contact Human Resources for a copy.
Employees who are not participating in the plan as of July 1, 1996, will not be eligible for this retirement benefit.
In order to participate in the APP post-retirement medical plan, you must retire after age 55 and have 20 years of credited service. Future post-retirement medical benefit eligibility will be limited to active employees who are either 55 years of age or achieve 25 years of service with the company by December 31, 1996. If you are not 55 or do not have 25+ years of service in 1996, you will not be eligible to participate in the Retirement Medical Benefit Plan. We will also be increasing the contribution cost for current retirees who are participating in the Retirement Medical Benefit Plan.
To help offset these changes and provide employees with more opportunities to save for retirement, the company will significantly enhance the 401(k) Savings Plan in 1996. Details of this enhanced plan are still being finalized, but highlights include increasing the company match to 6% (currently at 4%) and offering four additional investment options. All employees who complete one year of employment and work at least 1,000 hours in a calendar year continue to be eligible to participate in this "pre-tax" savings plan. These changes will be announced in further detail prior to the July Open Enrollment period, so that employees can take advantage of this expanded program.
In addition, we are pleased to announce that there will not be an increase in your out-of-pocket contribution for the 1996-97 flex benefits plan.
We recognize that employees are affected by these changes in a variety of ways. For this reason, I have asked all department heads to arrange for Kathi Abatemarco, associate director, Human Resources, to attend departmental staff meetings and discuss these changes in more detail.
For more information, please refer to the fact sheet (following) that contains questions and answers relating to these benefit changes.
Fact Sheet on Retirement Benefits
Q. Does this mean the pension plan is eliminated?
The Plan is not terminated. Employees participating in the Retirement Plan as of July 1, 1996, will continue to retain this benefit. However, future employees, and employees who are not plan participants as of July 1, 1996, will not be eligible for a pension at retirement.
Employees participating in the Cash Benefit Retirement Plan as of July 1, 1996 will retain dollars allocated to their account through July 1, 1996 and are entitled to that money, plus accrued interest, when they leave the company (if vested). Employees vested in the former Pension Plan are also entitled to receive, at the time of their retirement, whatever ""grandfathered'' benefits were earned through December 31, 1993. There will be an updated benefit statement distributed in June.
Q. Why is the plan being changed?
We simply can no longer afford to fund a pension plan. The Retirement Plan accounts for a significant percentage of our annual benefit expenses because it requires us to make cash contributions in the pension trust account, annually, based on the total number of current employees, as well as retired employees. The funding amount is calculated based on what the projected total retirement benefit payments will be, in the future, for all active employees at the company, even though the majority of our active employees do not stay with the company long enough to earn a significant benefit. In 1996, the contribution is in excess of $2 million.
Q. Will my ""Cash Balance Retirement'' account and/or Pension Plan benefits continue to earn interest?
The prior Pension Plan's frozen ""grandfathered'' benefit is a ""monthly defined benefit'' which is not affected by changes in interest rates, etc. This ""grandfathered'' benefit will not grow or increase in value over time. Employees participating in the Cash Balance Plan as of July 1, 1996, will not have additional allocations made to their account, but the ""cash balance'' amount will continue to accrue interest until withdrawal. This rate of interest will be determined in accordance with the plan document. Employees who are ""vested'' (meaning 5 years of credited service) are eligible to take their cash balance account with them when they leave the company. The prior Pension Plan monthly ""grandfathered'' benefit will start at retirement.
Q. What is a year of credited service?
A year of credited service is defined as 1000+ hours worked during a calendar year (1/1 - 12/31).
Q. What about the ""special grandfathered'' benefit?
The ""special grandfathered'' amount will be calculated based on the benefits accrued as of July 1, 1996. You will receive the greater of: (1) the sum of your frozen benefit, plus your cash balance as of 7/1/96, or (2) the amount you would have received as of 7/1/96, if the ""old'' plan remained in effect, plus your cash balance as of 7/1/96.
Q. Are post-retirement medical benefits being eliminated?
Employees who are either at least 55 years of age, or have completed 25 years or more of credited service by December 31, 1996 are considered to be eligible to receive post-retirement medical benefits. As has always been the case, employees must be at least 55 years of age and have 20 years of service when they retire in order to actually receive this benefit. Employees who are not at least age 55 or do not have 25 years or more of credited service with the company as of year-end 1996 will not receive post-retirement medical benefits at retirement.
What's happening "NJ rocks?" Haven't heard from you lately. What does your crystal ball say???
ReplyDeleteSo which NJ location is going to be the hub for the new classified call centers?
ReplyDelete10:43
ReplyDelete-It is APP. They're already handling a few of the sites. From the looks of the classifieds in our paper, there are misclassifications, the fonts are all different and they're publishing HUD/illegal words in real estate which could get them a nice fine for every ad that contains them.
I hope people care about these pension questions, because it could mean tens of thousands of dollars to each of you who were vested at the APP in 1997, and probably also to other properties Gannett bought that year.
ReplyDeleteThree curiosities regarding this 1996 letter. (Note: the APP Cash Balance Plan in effect 1994 through 1997, which Gannett's Carrie Oman sent me, defines contributions as being two parts -- "allocations" and "interest," which it shows to be 3% of salary and 6% of account balance, respectively, in 1994.)
1) No end date to the freeze on new allocations is defined in the 1996 letter, but another letter dated June 199. Nothing I've found tells me if new allocations were or were not being made to our Cash Balance accounts in December 1997, exactly. Either way, pre-1998 freezes on new allocations seem irrelevant, because new allocations under that plan would have ended anyway Jan. 1, 1998, when Gannett started allocations under its pension, right?
But this May 1996 letter, like a later one I have dated June 1996, promises " ... Employees participating in the Cash Balance Plan as of July 1, 1996, will not have additional allocations made to their account, but the ""cash balance'' amount will continue to accrue interest until withdrawal."
That's one of the things bugging me. It seems as if Gannett now may be trying to circulate some false logic that all our Don/Jules pension funds were frozen in time before 1998 and so a COLA-like adjustment is all Gannett is obligated to give us on the pension money it was given to steward.
But all of the Don/Jules pension obligation never was frozen, as far as I can tell. The interest was dynamic and was to continue to grow annually, thus also compounding the interest annually.
It's a contract, isn't it?
Gannett seems to be failing to recognize the obligation it took over to pay actual interest on an actual account balance, not an estimated growth calculated on a formula based on our subsequent pay raises under Gannett tenure.
2) It is not clear what happened to pre-1994 monthly annuity pension obligations to us -- the prior prior plan. Oman has represented to me that the 1994-1997 Cash Balance Plan SPD alone governs how even pre-1994 pension obligation is being paid out, but this 1996 Don/Jules letter seems to say the two pension funds were separate -- and simultaneous -- so we may have had both the defined monthly pension annuity due from the pre-1994 pension PLUS individual Cash Balance accounts guaranteed to collect individual interest earnings until we withdrew those accounts, in lump sum or annuity.
Do you read this as saying both pension plans were in effect in 1996, and presumably also in December 1997?: " ...The prior Pension Plan's frozen ""grandfathered'' benefit is a ""monthly defined benefit'' which is not affected by changes in interest rates, etc. This ""grandfathered'' benefit will not grow or increase in value over time. Employees participating in the Cash Balance Plan as of July 1, 1996, will not have additional allocations made to their account, but the ""cash balance'' amount will continue to accrue interest until withdrawal. ...
I wonder if other old-timers have received any pre-1994 pension benefits. Gannett is calculating pension due to me from 1987 through 1993 based only on the sum in my individual Cash Balance Plan account earned 1994-1997, as if the grandfathered Prior Plan was merged into the Cash Balance account at some point. I have no evidence those accounts were merged before they became a Gannett pension liability, though.
3) Gannett's claim is that the percentage of salary it uses to come up with its obligation to pay pension for us for all years before 1998 is determined "taking into account your benefit under the predecessor Plan."
Well, the more recent of the last two predecessor plans always, in every letter, assured us we would collect interest compounded annually until we withdrew our individual Cash Balance Plan sum, no matter what changes were made to allocations. Gannett has had our individual balances on record all along, because Oman gave me the balance of my account that was given to Gannett in 1997.
The APP Cash Balance Plan SPD defines the " ... interest amount will be set at the end of each calendar year, and the amount of interest credited to your account will be shown on your annual account statement.
Calculating growth in our known Cash Balance Accounts as only the proportion of salary change since 1998, as Gannett is doing on the alleged advice of an actuary, seems like an arbitrary and, perhaps, capricious measurement for the Cash Balance portion 1994-1997, especially since there seems to be nothing unclear, undefined or difficult about calculating the actual interest promised in what I thought was a contract. (The transitional percentage based on salary may be a fair measure for the pre-1994 APP Prior Plan.)
If someone didn't get any merit pay raises since January 1998, or transferred to a lesser-paying job but still continuously worked for Gannett, he gets none -- $0 -- of the gains Gannett earned on his Cash Balance account since 1997, or could get even less than he had on account in 1997!
Even if Gannett didn't maintain our Cash Balance Accounts individually since 1998, as it could have done, how hard would it be now to calculate more precisely how much interest was earned on those individual balances? Doesn't the pension fund have to report its percentage of gains or loses each year to the federal government?
Why wouldn't an actuary have advised Gannett to adjust these known individual Cash Balance accounts by that rate of the fund's gains from Jan. 1, 1998, to June 30, 2008? (Note: The APP Cash Balance SPD provides no option to apply any losses to our accounts.)
I suppose calculating Cash Balance account growth based on merit pay raises might, in some rare case, give someone more money than calculating actual interest, as I was under the impression all these years Gannett was doing, but I doubt any employee benefits from it. Haven't pay raises averaged 2%, sometimes less? My observation has been that parallel 401(k) earnings since 1998 have been more than 4% even in the worst investment years in "fixed income," which has been the least lucrative overall investment option.